Should you be buying Ethereum on payday? My findings for the month of January

My post about buying Bitcoin with part of your January paychecks generated a very good discussion in the comments section. In particular, one of the authors who I follow asked for an analysis to be done for other cryptocurrencies. The basis for these studies is that many employees receive their paychecks twice a month (on the 15th and the end of each month). Note that I have modified the title of this post to be more accurate regarding which days purchases would have been made.

As requested by Searching for Truth, these are my findings for those of you who thought of buying Ethereum on payday in the month of January from 2016 to 2019.

Ethereum purchases on January 15 from 2016 to 2019

I used to retrieve my data.  Although the genesis block for Ethereum was mined on July 30, 2015, the earliest data available was from August 7, 2015*. I then calculated annual gains from January 1 to December 31 for each calendar year. You can also see the performance of a $100 investment in Ethereum on January 15, 2016, and also on each successive January 15 from 2017 to 2019.

I should point out that while Coinbase started selling Bitcoin on October 26, 2012, they only started selling Ethereum in July 2016, nearly one year after its genesis block was mined. If someone knows where Ethereum was sold prior to that, it would be appreciated if you could let me know in the comments section below.


Jan 15 Payday ETH purchases

Source of Ethereum pricing: Coinmarketcap


Ethereum purchases on January 31 from 2016 to 2019

I used the same methodology to determine the performance of a $100 worth of Ethereum purchased on January 31 each year from 2016 to 2019.

Jan 31 Payday ETH purchases


My findings

My crypto holdings are very modest because I don't have much spare cash for most of the year. Because of this, I focused on accumulating small amounts of Bitcoin. But for those of you who have followed Ethereum, this data may not new to you. For me, on the other hand, it was very interesting to see the results.

Table 3 below summarizes how you would have fared if you are a HODL'er who bought $100 worth of ETH on paydays in January, depending on which year you started your purchases.

January Payday ETH purchases across years

The sample size for Ethereum is much smaller compared to Bitcoin because has not been around for as long. It's notable that the price of Ethereum peaked in January 2018, shortly after Bitcoin peaked in December 2017. If you started buying some ETH on your payday every January, the only year you would have suffered a loss was in 2018. More on this later because the results are based on an ETH price of $130.80 (January 1, 2020 closing price).

Additional evidence that the Ethereum market is resilient can be seen looking at purchases in January 2019. You would have made 15% on your $200 investment if you are a HODL'er (based on ETH price close on Jan 1, 2020). This is significant because that time span includes a -82% yearly change in Ethereum's value between January 1 2018 and January 1, 2019. 

But despite the profits that show up in Table 3, it appears that January is a volatile month to buy ETH if you HODL (based on past performance)**. Looking at year-to-year performance, it's either feast or famine:

  • Jan 1, 2016 to Jan 1, 2017 ---> +254% change in value
  • Jan 1, 2017 to Jan 1, 2018 ---> +9,357% change in value (yes, that's correct)
  • Jan 1, 2018 to Jan 1, 2019 ---> -82% change in value
  • Jan 1, 2019 to Jan 1, 2020 ---> -7% change in value


Taking another look at January 2018 based on the current price of ETH

I mentioned earlier that January 2018 was not a good period to buy ETH. But what if you based the performance of your 2018 purchases on the price of ETH today at $400 at time of writing, instead of $130.80 back on January 1, 2020?

The narrative changes in this case, because you would have made a profit of $368.14 (92% increase in value)!


So how do purchases in January compare to those in other months of the year? Please stay tuned for more, because I'll be looking at the performance of payday ETH purchases in February in an upcoming post.


Any special requests?

I'm also taking requests! If you would like an analysis of any specific day (Valentine's Day from 2013 to 2019 for instance, or another day that's meaningful to you), please let me know which one with a request in the comments below!


**Please note that I am not a financial advisor, and that the past market performance of any asset is no guarantee of its future performance. Please be responsible and only invest amounts that you are willing to lose in their entirety. 


Thanks for reading!

Good luck, and stay safe!


Lasted edited August 18, 2020 to include the **disclaimer. 

Original cover art by Damir Spanic on Unsplash. Modified by the author for the purposes of this post.


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Author ⌨ • Host of Blockchain Chat podcast 🎧📻⛓ • Early beta tester for NBA Top Shot & for NFL All Day 🏈 • Nine Lives Lounge member 🏀 • If I commented on your P0x post then you got a "like" and 100% of the tip! Twitter: @CryptoWordsmith

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